Question

Sheridan Repair Shop had the following transactions during the first month of business as a proprietorship. Journalize the transactions. (If no entry is required, select "No entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Aug. 2 Invested $11,290 cash and $2,740 of equipment in the business. 7 Purchased supplies on account for $450. (Debit asset account.) 12 Performed services for clients, for which $1,303 was collected in cash and $689 was billed to the clients. 15 Paid August rent $634. 19 Counted supplies and determined that only $263 of the supplies purchased on August 7 are still on hand.

Answer 1

Answer: Explanation:

We debit the contributed assets and credit the capital account

cash 11,290 debit

equipment 2,740 debit

capital account 14,030 credit ( 11290 + 2740)

we debit the asset and recognize the payable amount

supplies 450 debit

account payable 450 credit

we debit the assets and credit the revenue

cash 1,303 debit

account receivable 689 debit

service revenue 1,992 credit (1303 + 689)

we debit the expense and credit the asset we use to pay it

rent expense 634 debit

cash 634 credit

we debit the expense and credit the consumed asset

supplies expense 187 debit (450 purchase - 263 at hand)

supplies 187 credit